Consultants are subject matter experts who provide business advice or even operate alongside the organizations’ workforce, depending on clients’ requirements.

Moreover, they can work with higher efficiency than the organization’s employees because of the following reasons;

• Possessing more experience
• Unaffected by office politics
• Exposure to industry best practices and innovation
• Advantage of working for multiple clients
• And many more

These qualities make consultants a better choice for organizations, but their billable time comes at a hefty price tag. The chargeable hours of consultants cost more than those of the employees of that firm. Then why do organizations have to hire consultants despite their expensive billable hours? It is because the organization needs external support to achieve its business objectives, which otherwise isn’t possible with its existing workforce.

This article will help you understand the definition, advantages, and disadvantages of billable hours in consulting. Let’s dive deep:

What are billable hours in consulting?

Billable hours in consulting firms refer to the time spent on a project or service that is charged to the client at an agreed-upon hourly rate. This concept is prevalent in various service sectors, including IT consultancy, audit and accounting firms, legal advisory organizations, etc. For instance, in a legal firm, attorneys diligently track the hours dedicated to client cases, which are subsequently invoiced as outlined within the agreement.

The primary purpose of billable hours is to enable firms to determine if the consultants are meaningfully engaged in revenue-generating endeavors. Managing billable hours effectively is crucial for consulting firms to utilize consultants productively and enhance the project’s profitability.

What is billable time?

Billable time is an alternate term for billable hours that can be used interchangeably. It refers to the duration spent on a particular service or project that can be charged to a client.

For instance, in an AEC firm, if an architect spends 20 hours designing a client’s new office building, those 20 hours are considered billable time. The AEC firm can then bill the client for these hours as part of their project’s cost. This ensures the firm is compensated for the time and expertise devoted to the client’s project.

Calculating billable hours is essential for businesses who charge for their time or services.

Here is a detailed guide for the same:

How to calculate billable hours and billable value?

To effectively calculate billable hours and billable value, one can follow the steps given below:

Step 1: At the outset, a consulting firm must determine the hourly rate at which the clients will be charged for the services. This rate should reflect the expertise and the market demand for the skills provided.

Step 2: The professional services firm must keep a detailed record of the time that is spent working on projects/tasks that can be billed to clients.

Step 3: The summation of all the billable hours recorded over a specific period, such as a week, month, year, etc., represents the total billable time spent on client projects.

Step 4: If applicable, PSOs must add any extra fees or taxes to the client’s invoice, which would include expenses incurred during the project that are billed separately.

For example, if Steffi, a software developer, works 150 billable hours in a month at a rate of $25 per hour. Therefore, her billable hours are 150, and her billable rate is $ 25, and her billable value would be calculated as follows:

Billable Value = Billable Hours × Billable Rate

Billable Value = 150 hours × $25/hour

Billable Value = $3,750

So, Steffi’s billable value for the month is $3,750, which represents the amount she can invoice her client for her services.

Now that this is clear, let’s understand the difference between billable and non-billable hours.

Billable vs. non-billable hours: What’s the difference?

In consulting firms, distinguishing between billable and non-billable hours is crucial for efficient operations and consistent cash flow.

Below are the ways to determine how they differ.

Billable hours encompass the time spent on projects or tasks integral to seamless business operations, which is charged to clients to receive fair compensation from them. They serve as a primary income source and directly contribute to revenue, client satisfaction, and long-term profitability. Moreover, they are critical to the calculation of billable resource utilization, which is a key metric that allows managers to monitor and assess consultants’ performance.

Billable hours = Total number of work hours – no. of non-billable hours

Some of the common billable tasks include:

• Working directly on client-related projects
• Researching and collecting client-related information
• Brainstorming for client projects
• Responding to client-related emails
• Attending project-relevant meetings

Conversely, non-billable hours are the hours spent on activities that support the overall functioning of the firm but cannot be directly charged to clients. The consultants are compensated for their non-billable work, but the payment typically comes from the PSO that employs them. Additionally, non-billable hours play a crucial role in helping managers assess ways to minimize them and reduce idle time, increasing profitability.

Some of the common non-billable tasks include:

• Attending internal meetings and training sessions
• Regular administrative tasks
• Marketing activities for business development
• Payroll and hiring
• Planning the business goals and objectives

They play a pivotal role in business development, employee development, quality assurance, etc., contributing to business growth, enhancing employee performance, and ensuring high-quality service delivery.

Therefore, tracking them both is indispensable for optimizing business efficiency and achieving clarity regarding the services’ value and purpose within the organization. By managing billable vs. non-billable hours efficiently, consulting firms can deliver high-quality services, uphold client satisfaction, and secure long-term financial sustainability.

So, let’s move on to understand the significance of tracking billable hours for an organization.

Why is it important to track billable hours in consulting firms?

Tracking billable hours is essential for a business as it provides valuable data for decision-making, supports effective project management, and contributes to the overall success of consulting firms.

Listed below are some of the reasons why tracking billable hours are essential:

Facilitates project profitability analysis

Tracking billable hours against the revenue generated helps consulting firms assess the profitability of different projects or clients. This analysis enables firms to identify high-value clients and projects, as well as those that require adjustments to pricing or scope.

In addition, it provides insights into the financial health of the firm, allowing for accurate forecasting of revenue and budgeting for future projects. Moreover, organizations can identify areas where costs can be minimized, and additional resources may be needed.

Helps in performance evaluation and incentivizing consultants

By measuring the actual hours spent on each project, firms can assess individual consultant performance based on tangible metrics. This data-driven evaluation allows for fair and objective performance reviews, as well as identification of top performers and areas where additional support or training may be needed.

Additionally, tracking billable hours provides the foundation for compensation and incentive structures. It enables firms to identify and reward consultants based on their productivity and contribution to the firm’s success.

Ensures effective revenue generation

Accurately tracking and billing the time resources spent on client projects ensures that they are billing clients for all the services rendered. This allows them to maximize their revenue by capturing and invoicing for every billable hour worked by their consultants.

When billable hours are properly tracked, consulting firms can ensure that they are not missing out on any potential revenue opportunities. They can identify instances where consultants have worked on tasks or provided additional services that may have been overlooked or not accounted for in the initial project scope. By capturing these additional billable hours, consulting firms can increase their revenue streams and optimize their income.

Optimizes billable utilization levels of resources

By tracking billable hours, the firm can determine how much time is being spent on each client or project, allowing them to assess whether the allocated resources are being utilized efficiently. This helps the firm identify any potential bottlenecks or areas where additional resources may be required.

It ensures that projects are adequately staffed and completed within the designated timeframes. Without tracking billable hours, consulting firms would lack the necessary data to identify areas for improvement and may struggle to maximize their productivity and profitability.

Enables accurate and transparent client billing

Consulting firms typically charge clients based on the time and effort spent on their projects. By diligently tracking billable hours, consultants can provide clients with precise invoices that reflect the actual work performed.

This ensures that clients are charged fairly for the services they receive, fostering trust and maintaining strong relationships. In addition, it helps consulting firms maintain their financial viability and profitability by ensuring they are appropriately compensated for the time and expertise they dedicate to their clients.

In summary, tracking the billable hours helps in effective project management and contributes to the organization’s overall success.

How does consulting billing work?

There are two billing methods in management consultancy, i.e., billable hour or fixed-rate billing.

In a fixed-rate contract, the client pays the consultant a predetermined price to complete the task within the time constraints.

For the billable hours model, the consultant bills the client hourly, or the client has to pay for the billable work. Generally, management consultant companies charge their clients at the end of every month or after achieving a particular milestone.

How do billable hours work?

While hiring a consultant and signing the contract, both client and the consulting firm agree upon considering what percentage of hours should be billable.

To state a billable hour example, suppose the contract of a ten-hour project states that 80% of the total working hours will be considered billable. In this case, the client will pay the consultant eight hours even if they have spent ten chargeable hours.

Billable hours can be of any percentage value, e.g., 80%, 90%, or even 100%. For example, in100 billable hours, the client pays a consultant for every hour they spend on the project., the client pays a consultant for every hour they spend on the project.

Knowing how consulting billable hours works, let’s understand how to track billable hours with a billable hour chart.

This article explains how a modern resource management solution will assist your business move resources proactively from non-profitable work to profitable work and maximize overall billable utilization.

How to track billable hours using a billing hour chart?

A billable hour chart is a template many consultants use to calculate the time spent on a specific task or project for billing purposes. Please note that depending on the profession, the structure of a billable hour chart may differ.

Enlisted below are the best way to track billable hours by creating a billing time chart:

• Create a chart with columns such as date, task description, start time, end time, and total hours.
• Next, record your time. When you start working on a task, note the start time in your chart’s “start time” column. When you finish working on the assignment, note the end time in the “end time” column. Finally, calculate the total hours spent on the task by subtracting the start and end times.
• Fill in the “date” column with the date you worked on the task. Then, in the “task description” column, describe the job that you worked on.
• Then, calculate billable hours by multiplying the total hours by your hourly rate to calculate the billable hours for each task. For example, if you charged $50 per hour and worked on a task for 2 hours, the billable hours would be $100.
• Review your billable hours’ chart regularly to track your progress and ensure you’re staying within your budgeted time.

To help you understand it better, let’s consider the following example of attorney billable hours example- 

In this billable hour template, the attorney tracks the task date, the task description, start and end times, total hours, and billable hours. For instance, on April 1st, the lawyer had a 1.5-hour client meeting and charged $250 per hour, resulting in $375 billable hours. Similarly, on April 2nd, the lawyer spent 3 hours on legal research and charged $250 per hour, resulting in $750 billable hours.

In conclusion, this attorney billable hours chart can help the consultant keep track of the time spent on each task, calculate the billable amount, and ensure that they are billing clients accurately for the work completed.

This is how the chart can help organizations effectively track billable hours. Let’s know the challenges of the billable hour model for managing the consulting business.

Why is the billable hour model ineffective for the management of consulting businesses?

Consultant management’s hourly rate method isn’t as effective as other professional services companies such as accounting or law firms. It is because of the following reasons:

Lack of performance transparency

There is no reference to measuring the performance of consultants. The client can only track the number of hours in consulting. However, they cannot measure the value consultant adds to the project. Often the junior consultant may not have adequate knowledge and will be learning on the job at the client’s premises. But the person will still be billed at a specific hourly rate.

It is not measurable even if junior staff puts in more effort than experienced hires. Their pay scale and billable hours in the appraisal period would still be significantly lower than that of more qualified counterparts. With unequal pay and stressful juggling between several projects, work-life balance is challenging in consulting firms leading to a higher attrition rate.

Maximize billable hours at the cost of quality

Consulting firms charge clients for billable hours; hence, the more chargeable hours, the higher the cash flow. Therefore, consultants always feel pressured to maximize billable time at the cost of quality work.

The situation worsens when an untrained consultant forcibly maximizes the billable time but does not deliver as per the client’s expectation. Unfortunately, the clients cannot measure performance and must pay for the consulting hours. Eventually, it adversely affects client relationships.

Limits teamwork and professional development

Since consulting firms focus on maximizing billing hours and revenue generation, consultants often deviate from the project and their career objectives. As a result, they are not allowed to take up projects that can add value to their professional growth and development. Instead, they are assigned to the ones which generate additional cash flow.

While filling individual consultant utilization spreadsheets, most consultants focus only on their billable work. As a result, the consultants ignore and deny the need for teamwork to increase their billable time, jeopardizing the consulting firm’s credibility.

Reduces job satisfaction and contributes to high turnover

To achieve the target in the billable hour model, the employees are often made to work long hours. This will eventually cause stress, burnout, and poor work-life balance as the consultants feel the work pressure. Constantly working under such conditions may cause dissatisfaction among the consultants.

Furthermore, when consultants with relevant experience are given opportunities to enhance their utilization rates and juniors with less experience are given fewer options, it leads to disparities in pay and recognition. This can create a sense of inequality leading to job dissatisfaction and high turnover.

These are some of the limitations of the billable hour model. Now, let’s understand some of its benefits to consulting firms.

What are the advantages of billing consulting hours?

This section explains the benefits of billing by the hour in the management consulting business.

Improves individual employee productivity

Hourly rates encourage consultants to work extra hours, especially when the project needs attention. On the other hand, consultants working on fixed rates are not motivated to go the extra mile to achieve perfection. Instead, they settle for an average quality of work, just sufficient to maintain their relationship with the client. sufficient to maintain their relationship with the client.

Consultants working on billing hours won’t hesitate to work on a critical project that demands long hours. The consultants strive to achieve perfection that satisfies the clients and improves their firm’s credibility.

Forecast project resource cost accurately

Management consulting firms can accurately estimate the project resource costs that help their clients to finalize the overall budget. Consulting firms can lay out the hourly charge-out rates and even calculate the internal cost rates to measure consultation revenue. In addition, they can keep track of non-billable hours and mobilize the consultants to billable or strategic work.

Track the in-demand skills and competencies

The future of a consulting firm rests on the evolving skills and competencies of the consultants. The most convenient way to track the in-demand project skills is to identify a high consulting hours rate in accordance with skills capacity.

Consulting organizations can quickly narrow down future relevant skills with advancing technology and project techniques. In addition, it increases productivity by restructuring consultants based on in-demand competencies.

Balance the forecasted and actual hourly cost

Billable hours unify planned and actual costs via consultants’ utilization. Therefore, comparing actual and estimated consulting hours allows consultancy firms to set reasonable billable hours for the clients.

Resorting to a robust resource management tool helps them keep track of enterprise-wide consultants’ billable utilization, as entered on timesheets, and analyze the utilization against planned or forecasted hours. Managers use this analysis to improve future forecasting and align it to real numbers.

Assist in critical decision-making

Clients often engage consulting firms to help them select a specific product or decide on a software solution. Since these require significant investment and are related to strategic direction, they want a second opinion on their choices. Consulting organizations are better positioned to help as they have exposure to similar clients and industries.

These are some benefits of the billable hour model to consulting firms.

Given the benefits of billing hours, the following section elucidates the strategies to optimize billable hours.

6 Effective ways to maximize billable hours

What you do with your billable time determines your current income, but what you do with your non-billable time determines your future. ~ David Maister, an American writer and business educator.

Every professional services firm should aim to increase billable hours and reduce non-billable time for long-term growth and profitability.

Here are six strategies to achieve this critical goal.

Clearly distinguish between billable and non-billable tasks

It is crucial to establish a clear distinction between billable and non-billable tasks right from the beginning of client interactions, both in contractual agreements and within the project team. This differentiation helps build a shared understanding between the service provider and the client, reducing the instances of potential disputes.

For example, a client may express discontent during the billing process when a project meeting with them is considered a billable task. However, by explicitly defining the nature of tasks early on, such disagreements can be avoided. This proactive approach not only maximizes billable hours but also ensures a smoother billing process, fostering improved client relationships and maintaining a healthy cash flow.

Prioritize activities that contribute to billable work

To optimize billable hours, consulting firms should begin by creating a project plan to identify the high-priority tasks that directly contribute to revenue generation. By prioritizing these tasks, managers can ensure that the team focuses on critical and time-sensitive work, maximizing efficiency.

However, it is important to acknowledge that non-billable work may still be necessary within projects. Therefore, it becomes imperative to regulate routine, non-billable tasks effectively, allowing the team to allocate a significant portion of their time to billable activities. This approach not only boosts team productivity but also increases the billable value generated, ultimately improving the firm’s profitability.

Ensure competent resource allocation across all the projects

An organization’s inability to deploy the right-skilled consultants to projects/ tasks can be detrimental. For instance, assigning an under-skilled consultant to a high-priority job often results in project risks such as sub-par deliverable quality, schedule/budget overruns, etc. Consequently, the organization might have to spend extra hours to restore the quality or control overruns, that the client may not approve of. This may lead to uncompensated work hours, reducing overall billable value.

Conversely, deploying a highly skilled resource to BAU or admin tasks instead of booking them to critical and billable tasks can cause billing losses. Thus, allocating the right talent to the most suitable tasks across projects in an organization is essential to optimize resources’ utilization and enhance billability.

Track billable and non-billable utilization regularly

To accurately gauge the PSO’s utilization rates, organizations must consistently track both billable and non-billable hours that their consultants log. This is because professionals engaged in routine admin or BAU tasks do not directly contribute to revenue or billability.

Therefore, it is imperative for the manager to monitor consultants’ activities and distinguish between billable and non-billable work. With this insight, they can periodically mobilize consultants from non-billable tasks to billable work wherever feasible. This approach will help increase billable hours and improve resource utilization, ultimately enhancing the organization’s overall billability.

Automate or delegate non-billable tasks

Implementing task automation and delegation is integral to enhancing a firm’s billable hours and productivity. By automating routine or repetitive tasks and entrusting non-billable responsibilities to suitably skilled consultants, firms can ensure that their core team is engaged in critical and strategic initiatives.

To complement the automation, firms can outsource non-billable tasks to cost-effective consultants to make sure the niche-skilled talent can focus on high-priority work, optimizing resource utilization. This strategic approach to automation and delegation helps maximize billable hours, leading to improved profitability and increased client satisfaction.

Ensure accurate or transparent billing

Service-based firms often struggle to accurately bill clients despite establishing a clear distinction between billable and non-billable work. To address this challenge, it is imperative for firms to maintain a meticulous record of every hour worked, including cost rates and charge-out rates of consultants engaged. Additionally, comprehensive invoices must include a detailed breakdown of billable and non-billable hours.

A well-drafted invoice that helps understand charges payable at a granular level serves as a testimony to the organization’s transparency. It, thus, helps instill confidence in the accuracy of calculated costs, reducing disputes and convincing clients to make timely payments. Thus, the implementation of robust billing processes not only helps prevent revenue leakage but also enhances the service firm’s credibility, fostering strong client relationships.

Conclusion

Because of the cost difference, the first choice for any organization is always to use its internal workforce over a consulting resource. However, lacking the necessary skill sets and tight project deadlines may force them to lose sight of the consulting option. As consultants need to juggle between multiple clients, their job becomes very stressful. As a result, many consulting organizations face high attrition rates.

An organization should hire a consultant to ensure its internal workforce cannot undertake the project. The reason behind that inability can be due to tight deadlines, limited skills, and experience, organizational politics, limited creativity, etc. Most importantly, the organization should hire consultants they can entrust with task ownership, project completion, and fair billing practices.

Having said that, organizations can regularly upskill their workforce to adopt evolving technologies and stay relevant down the line. In this manner, they can become self-sufficient instead of paying hefty bills for consulting hours.

Glossary

SAVIOM Solution

SAVIOM is the market leader in offering the most powerful and configurable solutions for deploying appropriate resources to suitable projects. With over 20 years of experience, this Australia-based MNC has helped more than 100 clients across over 50 countries address specific business challenges. SAVIOM also provides tools for project portfolio management, professional service automation, and workforce planning software.

“The global management consulting services market is expected to expand from $819.79 billion in 2020 to $1201.06 billion in 2025 at a CAGR of 8%.”

With the growth of the sector, the value of its resources/consultants has also increased multifold. As a result, they are one of the most valuable assets in the consulting industry and contribute significantly to organizational success.

As most of the consultants work on an hourly basis, their overall billable time becomes very expensive for the clients. So firms must use them efficiently. However, most firms fall short when it comes to effective resource scheduling. They rely on spreadsheets or homegrown solutions and tools for scheduling resources. These solutions cannot prevent the idle time of these external resources and unnecessarily increase the cost.

This blog discusses how consultancy firms can benefit from a robust resource scheduling solution.

But before digging deep into it, let’s understand everything about consulting firms and what they do.

What are consultancy firms?

Consulting firms are business entities that offer professional advice, ideas, and solutions to companies undergoing crises that their in-house resources cannot solve. Consultancy firms offer specialized knowledge and expertise to help clients solve complex problems, achieve specific goals, and make informed decisions.

In simple words, when a company requires expert advice and guidance to address an immediate problem, it contacts a relevant consulting firm to provide a quick solution. These firms play a crucial role in providing strategic direction to businesses across various departments, such as manufacturing, sales, marketing, or human resources.

Consulting firms provide industry-specific personnel or subject-matter experts, known as consultants, to analyze a specific problem at hand and find multiple options to provide a solution. The following are some of the ways how consultants can help a business:

• Construct business models.
• Assist with problem-solving.
• Provide cost-effective solutions.
• Predict risk and innovate products
• Strengthen talent management processes.

Types of consultancy firms and what they do

Consulting firms are present in more or less every industry. Here are a few examples:

IT consultancy firms

IT Consulting companies help clients’ businesses design and implement information technology (IT) systems and infrastructure. The objective of seeking IT consulting services is to provide guidance in simplifying various business and technology functions by introducing robust software and solutions.

Audit and accounting consultancy firms

Audit and accounting consultancy firms help organize and manage the company’s cash flow to avoid issuing money into unfavorable ventures. They also conduct annual audits to investigate all financial aspects of a company’s business. Also, these firms advise on tax obligations, the implications of new tax legislation, and tax mitigation strategies.

Engineering consultancy firms

Engineering consultancy firms provide engineering services and expertise to companies in need of a specialized skill set. Generally, they have experienced engineers to provide short-term technical advice for a fee. These firms have expertise across many sectors, including civil engineering, rail, telecommunications, energy, automotive, space, and defense.

Construction consultancy firms

Construction firms help companies construct a wide variety of buildings, developments, housing, path, pavement, roads, motorways, and other types of construction projects. They offer extensive analysis of the environmental factors to ensure that the structure is durable, sustainable, and functional.

Law firms

A few experienced lawyers come together and form a law firm to engage in law practice. Law firm consultants advise clients about their legal rights and responsibilities. These consultants even represent clients in civil or criminal cases, business transactions, and other matters in which legal advice is sought.

Now that we know the different consultancy types and functions let’s understand how resource scheduling is necessary for consultancy firms.

How is resource scheduling different for consultancy firms?

Resource scheduling for consultancy firms is different from other industries because of their unique business model. Most consultancy projects are of short duration, and clients are billed on an hourly basis. Thus, managers need to keep track of every resource and where they are spending their time. Otherwise, it will result in poor resource utilization.

For example, let’s assume a client hired a lawyer for a specific purpose. As per the agreement, the lawyer would work for 3 hours on the project. Now another client booked the same lawyer for a much larger project with a demand of 6 hours per day.

Now, the lawyer hired for the two projects spends much of his/her time on the larger project and does not provide attention to the smaller project.

Subsequently, it results in low productivity, poor quality of deliverables, and client dissatisfaction, leading to revenue loss and reputation. Therefore, resource managers need to consider consultants’ availability and capacity before booking them for assignments.

A resource scheduling software enables you to track resource utilization and optimize resource schedules as per requirement. It helps to ensure that resources are scheduled to be billable to maximize revenue. It also lets you see all the consultants with clear visibility of their skills, location, availability, cost, and other relevant information for competent resource allocation.

Significance of resource scheduling for consultancy firms

Consulting firms cater to multiple clients at once. Therefore, they need to have transparency on their resource profiles, project demands, and more. This is why resource scheduling is critical.

A resource scheduling tool provides data-driven foresight into various resource metrics like resource availability, capacity vs. demand gap, utilization, and more. Based on this, managers can implement the proper resourcing measures and eliminate potential project challenges. It ensures that the right resources are available at the right time and for the right projects, enabling firms to deliver high-quality services while maximizing profitability.

Besides, it shaves off large amounts of time wasted collecting, analyzing, and presenting the data. It reduces the stress that managers experience in dealing with large amounts of information that can often become confusing. It also improves the overall communication of the company’s consulting staff by presenting resource plans and data in a way that is simple yet powerful to understand.

Benefits of resource scheduling software for consultancy firms

Here is a rundown of the top benefits of a resource scheduling tool for a consultancy firm:

Gain complete visibility across the organization

As mentioned before, a consultancy firm may have competencies spanning numerous countries. Based on that, resources can have multiple reporting lines. For multidimensional scheduling capabilities, firms need overall visibility across the enterprise.

Resource scheduling tool integrates all resource-related information on a centralized system. It keeps one informed of all allocations and availabilities and manages the whole process effortlessly. Also, it captures the updates when employees take a vacation, family leaves, or public holidays.

Moreover, 360-degree visibility helps to identify and leverage cost-effective global resources across boundaries. You can access every data, be it project-related or non-project-related.

Deploy the right resources to the right tasks

As every resource data is available on a single platform, one can assign competent resources to practical tasks. You can find the right resource using advanced filters such as skills, qualifications, experience, location, availability, cost rate, and so on.

Moreover, it maintains real-time competency information to match skill set proficiency with the right task. Employees can even update their competencies themselves, and supervisors can validate the authenticity of the same.

You can distribute resources based on the requirement of the projects. Resource scheduling and allocation software enables you to replace high-cost local resources with low-cost global resources. That way, you can facilitate the best resource allocation for maximum profitability.

Maximize billable and strategic utilization

Consultants charge their rates on an hourly basis. Thus, billable utilization is a critical KPI for a consultancy firm to ensure profitability and sustainability.

A resource scheduler can help track resource utilization. Managers can get a comprehensive view of the actual number of hours logged in by the employees against the planned ones. If there is an anomaly, they can take remedial measures to control the situation.

Furthermore, it can forecast billable and strategic utilization of the workforce ahead of time. You can also compare the actual utilization rates against forecasted ones and take remedial actions, such as mobilizing resources from non-billable to billable work.

Moreover, resources can view their utilization and increase their productivity accordingly. The resource heatmaps provide them with a glimpse of their usage. Also, stakeholders can view utilization rates and make data-driven decisions to improve the organization’s health index.

Deliver projects within the deadline

Assigning the right person with the right skills is crucial for a project to finish within the budgeted time without disrupting the quality. A resource scheduler lets you foresee the project demand. So, with enterprise-wide visibility, you have the chance to allocate a competent resource at the right time, ensuring timely delivery.

A resource booking software negates the chances of allocating under or overqualified resources on tasks. Underqualified resources feel frustrated and often delay delivery timelines. On the other hand, overqualified resources experience boredom and feel deprived. In both cases, employee engagement and, subsequently, productivity are adversely affected, resulting in project overruns.

The centralized solution enables managers to consider the employee’s skills and interests before task allocation. Consequently, it maximizes the chances of successful delivery within the duration.

Optimize resources through leveling and smoothing

In a consultancy firm, you are unlikely to have resources all the time. But it would help if you made adjustments to cater to the numerous client demands. The client requirements also can change suddenly.

A resource allocation software can help you optimize resource schedules based on your needs. For instance, when a project has a specific deadline, you can exercise resource smoothing. By assessing the resources’ workload, you will be able to know if they are overutilized. This way, you can redistribute their workload or pull in additional resources to balance it out.

Otherwise, if the project deadlines are flexible, you have the liberty to move around the timeline to match the resource schedule. That way, you can level the work as per the resources’ schedules and guarantee optimal utilization.

Minimize project costs with real-time reports

A dynamic resource scheduling software can track critical financial indicators for a project, like resourcing cost, revenue, profit margins, and overheads. You can take control of project costs ahead of time with forecasted cost reports, forecast vs. actual utilization reports, and so on. Also, you can assess current financial conditions and take corrective actions.

By implementing a resource scheduling solution, managers can drastically reduce project costs. Here’s how:

• Eliminate under/over-skilled resources on projects and reduce excess cost.
• Utilize cost-effective global resources without compromising quality.
• Reduce unplanned attrition with corrective schedules.
• Improve productivity by multi-skill building through a job rotation strategy
• Minimize last-minute hiring costs with visibility into pipeline project demands

Frequent hiring/firing creates a negative image for the organization. It takes up a lot of money and also affects the existing employees’ morale. Forecasting enables proactive smoothening of project workload and reskilling employees. That way, you are saved from making last-minute hiring/firing decisions.

Best practices for effective resource scheduling in consultancy firms

The advantages of proper resource scheduling are too many to be overlooked by competitive consultancy firms. To reap these benefits, companies should strive to follow and implement the proven best practices mentioned below. Let’s take a look:

Conducting a thorough analysis of current resource management strategies

Before implementing a resource scheduling solution, it is crucial for consultancy firms to conduct a comprehensive assessment of their current resource management practices. This will help them identify existing inefficiencies, gaps, and pain points in their resource allocation process. By analyzing the current workflow, firms can better understand their specific needs and requirements, enabling them to select the most suitable resource scheduling solution.

For example, a consultancy firm may discover that they lack visibility into resource availability, resulting in frequent scheduling conflicts such as double bookings. Therefore, the firm can prioritize finding a resource scheduler that provides real-time visibility into resource calendars, allowing them to make informed scheduling decisions. It will also enable managers to make changes to resource schedules in real-time to align with the changing project requirements and organizational priorities.

Define roles and standardize processes

Successful implementation of a resource scheduling solution requires clear and well-defined roles and processes within the consultancy firm. This involves establishing a clear hierarchy of decision-making authority and assigning specific roles related to resource management. Moreover, it also involves standardizing internal procedures such as resource requesting, conflict resolution, schedule changes, etc.

For instance, the consultancy firm designates a resource manager who is responsible for overseeing the scheduling and allocation process of a specific department. Besides that, the organization also clearly defines the responsibilities of individual consultants within the same department. By doing so, the firm can streamline the scheduling procedure, ensure accountability, and prevent internal conflicts.

Provide training for quick adoption

Providing comprehensive training and ongoing support to the staff is crucial to ensure the successful adoption of resource scheduling software. Training sessions should be conducted to familiarize employees with the new system, including how to input data, navigate the interface, and make scheduling decisions based on the system’s capabilities.

Consultancy firms can conduct workshops, webinars, and hands-on demonstrations to train employees and help them understand the full functionalities and benefits of the resource scheduling solution. Furthermore, regular check-ins and feedback sessions can help address any challenges or questions that arise during the adoption phase. This ongoing support ensures that employees feel supported and confident in utilizing the resource scheduling software.

Regularly monitor and improve resource scheduling strategies

Consultancy firms must foster a culture of continuous learning and improvement to enhance their resource scheduling strategies. They should monitor and track key performance indicators (KPIs) related to critical attributes such as resource utilization, project completion rates, client satisfaction, etc.

Moreover, by tracking these metrics, consultancy organizations can gain insights into the effectiveness of the scheduling solution and identify areas for improvemens. This will enable them to proactively identify and mitigate resource bottlenecks, facilitate competent allocation, and enhance resource efficiency.

By following these best practices, consultancy firms can maximize the benefits of resource scheduling solutions and achieve efficient resource management.

Conclusion

Resource scheduling software can enhance the productivity of the consultancy firm’s resources through effective allocation. It helps improve billable and effective resource utilization for the profitability and sustainability of these firms. Moreover, it helps in the successful delivery of projects, thereby enhancing client satisfaction and market reputation.

The Glossary

SAVIOM Solution

SAVIOM has over 20 years of experience helping multinational clients manage their resources efficiently and effectively. With over 20 years of experience, this Australian-based MNC has a global presence across 50 countries and has helped 100+ clients meet their specific business goals. Saviom also provides tools for project portfolio management, professional service automation, and workforce planning software. So, SAVIOM can help your business to establish an efficient system geared towards your specific business challenges.

As a result, accounting firms must build an efficient and future-ready workforce to keep up with these changing trends and prosper in the hypercompetitive market.

However, building an optimized workforce while ensuring every assignment is delivered successfully is easier said than done.

Most audit and accounting businesses worldwide are dealing with issues such as talent shortage, miscommunication between sales and delivery teams, reliance on inefficient tools for consultant scheduling, and sub-optimal resource utilization, among others.

Therefore, the pertinent question is, how to address these resourcing challenges in accounting & auditing firms and optimize the workforce?

This informative article addresses and highlights various resource optimization measures within this industry. But before we get there, let’s begin with the basics-

How do auditing and accounting firm function?

Auditing and accounting are critical components of any business’s financial operations and record-keeping activities. Their duties and objectives, however, are distinct. While accounting encompasses everything, including the flow of money from the organization to the company’s management, auditing is a more specialized function.

Accounting firms’ primary functions are keeping an accurate record of financial transactions, keeping a journal of expenditures, and so on. The most fundamental accounting function is data recording and adhering to compliance requirements.

Auditing function examines a company’s operations to ensure that its financial statements and records accurately reflect its business status. It also includes assessing a company’s health and safety provisions, IT security and helps make decisions accordingly.

The firms may also offer advisory services covering a broad spectrum of areas, including advising clients on improving their business performance, rearranging their corporate structure, or dealing with risks they face, etc.

Now that we have established the auditing and accounting firms’ functions, let’s look at some of the critical roles in the industry.

Key resources in the Accounting Industry

• Chief Financial Officer (CFO) – The CFO is a C-Level Executive responsible for overseeing and managing your business’s various financial aspects. The CFO is concerned with the company’s long-term success, ROI (return on investment), resources, and direct investment.
• Accountants – The accountant in the firm is responsible for performing and overseeing the essential, day-to-day functions of the company’s accounting department. This includes accounts receivable, accounts payable, tax preparation and payment, payroll, internal accounting, and operations.
• Bookkeeper – The bookkeeper is responsible for the daily performance of the accounting department’s basic operations. This includes creating and maintaining invoices, preparing checks, processing stop payments, filing, and keeping a record of documents.
• Auditors – The primary goal of the auditors is to identify potential risk areas for a company, such as mismanagement, fraud, and other discrepancies. Companies hire these types of professionals to avoid legal and financial problems.
• Tax Executives – They do tax planning and preparation for individuals, estates, trusts, and small enterprises and research uncommon tax issues. In addition, they prepare tax returns, research tax questions, and counsel clients on tax issues.
• Consultants – They are responsible for internal and operational control procedures, budgets, analyses of projects or departments, and a variety of particular-purpose studies. They also supervise consulting assignments within client organizations.

Now that we’ve established the functions of the critical roles let’s look at the significance of resource optimization in the accounting industry.

Significance of resource optimization in Auditing and Accounting Firms

As mentioned earlier, audit and accounting firms operate in a highly competitive and volatile global market. As a result, they face some of the most pressing challenges, such as skill shortages, cost pressure due to global competition, suboptimal resource utilization, unplanned attrition, burnout issues, and so on.

Resource optimization is the ideal technique or strategy to combat these challenges effectively and efficiently. Managers can perform gap analysis by assessing current workforce capabilities and future staffing needs. Accordingly, they can take course-corrective measures and continuously match supply with the demand. This ensures optimum consultant utilization and improve business profitability.

For instance, accounting managers can adopt the resource leveling techniques for the projects with flexible timelines and adjust the start and end date according to the consultant’s availability. On the other hand, for time-sensitive projects, managers can pull in more consultants and redistribute the booked resources’ schedule.

This way, the tasks can be accomplished without deviating from the timeline. It will also improve employee morale and reduce burnout rates, resulting in higher profit margins, cash flow, and overall business efficiency.

Given the importance of optimization, let’s examine the best ways to practice these resource optimization strategies in the audit and accounting sectors.

7 strategies to optimize resources in the Audit and Accounting Industry

Resource optimization techniques are critical in the audit and accounting sector to ensure optimal staff utilization and improve business efficiency.

Here is an overview of the same –

Forecast and bridge the capacity gap of consultants in advance

Due to a lack of foresight into future audit and accounting projects, organizations often fail to identify the resource demand for consultants with their corresponding competencies and skill sets. This often translates to skill shortages leading to last-minute firefighting for competent resources, cost overruns, project delays, and compromised deliverables.

In this case, managers should proactively foresee the demand of current and pipeline projects and implement resourcing measures to bridge the capacity vs. demand gap. Managers can either undertake planned hiring or devise a training and upskilling program if there is a shortage of accountants or auditors. This way, organizations can avoid last-minute firefighting for consultants, avoid cost escalations, reduce overall risks, and maximize productivity.

Evaluate consultant’s availability & vacation before allocation

An accounting consultancy firm often juggles various projects, especially during the peak season, such as fiscal year-end. Therefore, managing and tracking consultants’ overall availability for events such as sick leave, time off, and public holidays is crucial. Failure to do so may result in resource’s overallocation or project delays. Furthermore, if the project is handed over to a less competent resource, it results in project delays and sub-par quality of deliverables.

Therefore, tracking their availability in real-time is critical before allocating consultants to projects. This will ensure that the right consultant is allocated to the right project at the right time. Further, this reinforces the organization’s ability to deploy appropriate resources to suitable projects at the right time and cost. It ensures profitable client engagement and optimal utilization of the accounting staff.

Monitor and track audit & accounting personnel’s utilization levels periodically

In a profession where accuracy and attention to detail are essential, an under/overutilized workforce can damage the firm’s profitability if left unregulated. At times, managers overlook the utilization of the audit and accounting staff when resources are engaged in a non-billable task. As a result, this leads to a significant decrease in productive utilization, reducing overall profitability.

Tracking the team’s utilization rate periodically will reveal whether the team is over/underwhelmed with the workload. In addition, monitoring the utilization rates will help you re-plan and reassign tasks if needed. Both overutilization and underutilization can have adverse effects on the project. By defining appropriate variables to measure billable utilization and improving resource allocation, one will be better prepared for future projects.

Cross-train audit & accounting staff to combat resource planning bottlenecks

Like any other industry, accounting & audit projects may encounter sudden unplanned absenteeism from critical resources owing to illness, resignation, vacation, or a family emergency. As a result, it can create a bottleneck, delaying subsequent dependent tasks. To address such unforeseen circumstances, it is imperative to have a skilled, competent, and adaptable workforce ready to step up when a staff member is absent.

Implementing cross-training programs will help accounting personnel comprehend the department’s broader business operations, utilize their skills in different fields of operation, and work on multi-faceted projects. This will reduce the monotony of the job and ultimately boost productivity, and foster collaboration.

Implement resource optimization techniques during seasonal fluctuations

Projects in audit and accounting firms are seasonal, with a noticeable surge in workforce demand for auditors, accountants, and tax analysts, among others, throughout the year. However, these organizations are often ill-equipped to meet these sporadic spikes. This results in an overworked and demoralized workforce and substandard deliverables, causing a loss of billable projects and clientele.

Managers can address this issue by implementing optimization techniques to manage these seasonal demands effectively. If the timeline is flexible, one can implement resource leveling to adjust the start and end dates and balance the workload of resources. If the project timeline is too rigid, additional staff can be pulled in to assist with task execution. This will reduce workload and increase profitability.

Keep your consultants updated about the latest tax laws and policies regularly

Compliance monitoring is a quality assurance test that forms the crux of an accounting firm’s functions. Therefore, through formal training, accounting and auditing firms must ensure that their consultants stay updated with the latest developments, such as new, revised, or withdrawn regulations.

With this accurate information, the audit and accounting firm can help their future clients to respond to changes strategically rather than reactively. Also, prepare their customers to improve the effectiveness of their company’s policies and procedures. As a result, the accounting system, processes, and consultant’s performance will improve significantly.

Create the right mix of permanent and contingent workforce

During the financial year-end, an accounting consultancy firm often faces high demands for accountants, tax analysts, budget analysts, etc. If your company lacks the right mix of skilled workforce, it will result in loss of business opportunities, client dissatisfaction, hamper market reputation, and reduced profitability.

To combat this, managers should first analyze the nature of the project and then create the right balance of permanent and contingent consultants. This will significantly reduce the workload of critical permanent resources. They can also leverage a competent resource with a lower charge-out rate as long as the quality of the deliverables isn’t compromised. This will help keep resourcing costs in check, ensure deadlines are met, and keep the project budget under control.

Now that we’ve discussed effective ways to optimize audit and accounting firm resources, let’s look at how resource management software can help.

How can resource management software help in workforce optimization?

From the previous sections, it is evident that workforce optimization is a significant function that audit and accounting firms must implement. An advanced resource management solution can be a one-stop solution to plan, forecast, and build an optimized workforce.

The tool provides 360-degree visibility into the resource pool of audit and accounting firms and helps centralize information on a single platform.

The resource forecasting feature can identify resource demand ahead of time. This enables one to take suitable measures to bridge the demand vs. capacity gap, reducing resource shortages in the accounting and auditing firm and streamlining resource allocation.

Further, the tool provides the forecast vs. actual utilization reports and heatmaps, which give insights if a resource is being over- or underutilized. Accordingly, accounting managers can implement corrective measures and optimize utilization rates.

Moreover, using the modeling and simulation technique within the tool enable managers to arrive at the best possible outcome, and juggle resources across projects. Lastly, the tool provides real-time business intelligence reports with actionable insights to strengthen your decision-making process.

In a nutshell, resource management software can be a game-changer in optimizing the audit and accounting workforce.

Conclusion

Maintaining a large talent pool of highly skilled accounting and auditing consultants can be difficult in an industry that relies heavily on knowledge and experience. As a result, managers frequently face resource constraints, particularly in multi-project environments.

However, by combining the aforementioned resource optimization strategies with robust resource management software, auditing and accounting firms can ensure successful project delivery.

So, how do you optimize resources in your audit & accounting firm?

The Glossary

The SAVIOM Solution

SAVIOM is the market leader in offering the most powerful and configurable solutions for managing enterprise resources efficiently and effectively. Having more than 20 years of experience, this Australian-based MNC has a global presence in over 50 countries. It is also popular with more than 100 customers and helps them achieve their business goals. SAVIOM also has products for project portfolio management, professional service automation, and workforce planning software which can be easily customized as per business requirements.

The business industry has seen a massive transformation in terms of work culture, management practices, skill requirements, and so on over the past decade. Technology is the major propeller behind these reinventions. It has empowered and enabled businesses to expand their horizons.

For example, telepresence has facilitated employers to recruit from beyond geographical peripheries. The second major example is Automation. It has eliminated the need to spend countless hours on mundane admin work. Employees can now focus and spend time on human-specific business work that demands critical thinking. The list of these instances is endless.

One of the major industries that have seen a paradigm shift is the Professional Services Industry.

With ever-evolving market trends, there is a radical shift in customer demands, business models, and the way services are delivered to the clients.

It’s time for decision-makers to accept and adopt these trends to stay relevant in the long haul.

This blog highlights 5 major professional services trends that are disrupting the industry. Before we dive deep into it, let’s get the basics right.

What are professional services?

Professional services encompass a plethora of occupations that extend support to businesses in the form of consulting, advice, or by performing other tertiary roles.

Some of the key services include:

• Law- Providing legal assistance to the firms to ensure they adhere to the current laws and regulations.
• Audit & Accounting– Reviewing and assessing financial accounts to ascertain the legality of their financial records.
• Consulting- Working coherently with the organization to help them maximize their operational efficiency
• Financial advisory- Helping the decision-makers to make sound investments and secure their finances
• Actuarial Science- Predicting and evaluating future financial risks using statistical models

The reason behind taking external help from these services is their professional expertise, business acumen, and years of experience. Thus, to keep serving the organizations to the best of their abilities, every professional services firm has to keep up with the trends and adopt a core strategy that aligns with the ever-evolving market.

Let us see how

Re-evaluate the core strategy to align with the new norms

The two paramount characteristics that set the professional service firm apart from other business are:

• The bespoke service they offer to every client regardless of the tools and models used.
• The underlying nature of cultivating and fostering long-lasting client relationships.

In order to maintain the competitive edge, it’s imperative to walk along with the new norms that are redefining your industry. For instance, you cannot compete in a technology-driven market with silos of data and legacy tools. You need to equip the advanced and robust software to provide automated delivery and more-accurate insights to the clients.

The new norms that are driven by technology and other factors demand a more agile, value-driven, and tech-enabled firm. Thus one has to focus on the proactive and targeted transformation of their core strategy to increase sustainability.

These innovative trends that are compelling you to redefine your strategy can be categorized into two sections:

• Business-centric
  • The emergence of Automation and Artificial Intelligence
  • Increase in globalization and virtual offices
  • A value-driven revenue model
• Employee-centric
  • Recruitment of hybrid talent to fill the skill gaps
  • A tech-enabled work-culture to enhance team engagement

Here is a description of each one of these in detail:

The trends that will transform the PS industry

• Business-centric trends

Emergence of Automation and Artificial Intelligence

In order to provide the most appropriate business solutions to clients, professional services demand extensive data-analysis. This process is time-consuming and prone to human errors.

The onset of Artificial Intelligence and Machine Learning has made this tedious process simpler. It essentially interprets the real-time data and organizes large chunks of data into usable information. Resources also can learn from the past data and generate strong, data-driven insights for the clients. This systematic arrangement of data helps them make sense out of complexities conveniently.

Technological advancement does not limit here. Organizations are now gearing-up to automate the mundane back-end tasks that limit the employees from doing valuable work. This enhances task efficiency and enables resources to focus on activities that are role-specific and polish their skillset and capabilities.

Emerging technologies such as RPA (Robotic Process Automation), Chatbots, IoT (Internet of Things), Block-Chain, and CNN (Convolutional Neural Networks) are creating a new business model for traditional businesses.

According to a report by Mckinsey, a leading bank automated about 900 of its back-end operations to relieve 50% of its full-time employees from their admin tasks. Some of these employees were successfully deployed in other meaningful activities within the bank to increase overall productivity.

Increase in globalization and virtual offices

Gone are the days when recruitment was restricted to specific locations due to communication, collaboration, and performance tracking barriers. A myriad of collaboration and video-conferencing tools are available today to make information-sharing a breeze.

Moreover, intuitive project and resource management tools have allowed managers to keep a track of their projects and resources’ performance from across geographical boundaries. Due to these provisions, clients are approaching the firms based on their reputation and work regardless of where they are located.

In addition to getting global clients, firms are recruiting valued talent with niche skills from across the globe. This is because virtual offices and remote work have become an integral part of the work culture and environment. Moreover, the COVID-19 pandemic has escalated the emergence of virtual offices.

In fact, a recent study from Gartner reveals that 82% of Company Leaders Plan to allow employees to work remotely.

In short, the skills scarcity and unavoidable circumstances have led to an increase in globalization and remote workspace.

A value-driven revenue model

Professional services like Audit & Accounting charge the client on an hourly basis. This billing model does not consider the value generated out of each task. For example, an hour of billable work is leading to 10% of tax savings for the client. However, you are still invoicing the client based on the employee’s charge out rate rather than on the task’s value.

This reduces the profit margins for professional services firms and the clients fail to see the benefits of the overall project. To change this, firms are now opting for a value-driven revenue model that will bill the client based on the benefits and profits they make during the course of the project.

A client will now pay for the overall gains such as tax savings, ROIs, insurance claims, and so on. This shift from time-driven to the value-driven model allows PS firms to get more clients and increase their profitability.

These are some of the business-centric trends that are disrupting the PS realm. Let us now see the trends that are transforming the workplace culture,

• • Employee-centric PS trends:

Recruitment of hybrid talent to fill the skill gaps

Often the firms end up hiring permanent employees for one-time project tasks. This results in unnecessary administrative overhead costs. Unplanned or inappropriate hiring happens due to inefficiency in pipeline management and capacity planning. Now that organizations have the liberty to digitize their resource and project management platforms, they are going for a hybrid-talent model.

Hybrid talent refers to creating the right resource mix i.e. a team of full-time employees, contractors, freelancers, and so on. It also includes creating a team based on the band-levels, resource costs (local and global resources) to control the project financials.

Professional services firms are now adopting advanced tools that predict the resource demand in advance and allow them to draw out a hiring plan. This greatly reduces the project resourcing costs and increases their profitability.

Furthermore, these tools provide real-time visibility of resource schedules and their utilization levels. Managers can leverage this and optimize resource allocation thereby preventing employee burnout.

A tech-enabled work-culture to enhance team engagement

Team engagement is critical to driving business to success. According to Forbes, highly engaged teams show 21% greater profitability. Encouraging team engagement is easy when you are working in co-located offices. However, it becomes a challenge when your team is distributed across different locations.

With the advent of highly-advanced collaboration tools and companies investing to foster a tech-enabled work culture, employees can communicate and share important information in real-time. This enhances team engagement and allows quick problem-solving.

Moreover, when teams are connected, their productivity increases and gives better results. Professional services firms are therefore indulging in building a tech-enabled work environment that will strengthen their employee’s morale and improve performance.

Conclusion- The future of Professional Services

The growing trends and technology have provided a historic opportunity for the professional services industry to pivot and change the nature of business.

If the firms adapt to these evolutions, how will the future face of PS look like?

The project-delivery will be more efficient, accurate, and data-driven. The client-engagement will grow leaps and bounds in the presence of advanced collaboration tools. The ease of sharing real-time data will escalate and simplify performance tracking.

Business Intelligence will provide comprehensive reports on varied project metrics that will allow you to predict and plan in advance. In addition to this, automation will improve the productive utilization of resources to a great extent.

Overall, the ever-evolving trends will disrupt and change the face of the professional services industry.

Are you ready to evolve and grow along with them?

The SAVIOM Solution

SAVIOM is no doubt the market leader in offering the most powerful and configurable Enterprise Resource Management Solution. Having more than 20 years of experience, this Australian-based MNC has a global presence in over 50 countries. It is also popular with more than 100 customers and helping them to achieve their business goals. SAVIOM also has products for project portfolio management, professional service automation, and workforce planning software which can be easily customized as per business requirements.

Many project-intensive businesses use either silos of spreadsheets or some home-grown tools for scheduling and planning their resources. These solutions are incredibly limiting, time-consuming, and hard to maintain. It creates double bookings, over/underutilised resources, undesirable hiring/firing, low staff morale, improper planning of pipeline projects, etc.

To achieve the full potential of your resources, it is crucial for an audit and accounting firm to establish an enterprise-level resource scheduling and planning process.

This guide has been designed for an audit and accounting business to get a comprehensive understanding of resource scheduling and planning system. It will allow the business to establish the right process and the tool.

What is Resource planning and scheduling?

Defining Resource Planning

Resource Planning is the method of planning and utilising various types of business resources effectively and efficiently across the enterprise. These resources can be workforce, assets, facilities, equipment, etc.

Defining Resource Scheduling and Resource Allocation

Resource scheduling is the most crucial part of the resource planning process. It involves identifying and allocating resources for a specific period to various types of activities. These are related to project work or non-project work, i.e., like BAU, Support, admin, operation, etc.

Resource allocation is the other word for resource scheduling. In short, resource allocation identifies and allocates resources to the projects at a high level.

One must avoid the “first visible first fit” approach instead of the “best visible best fit” principle for resource allocation.

Read More
The 5 Best Methods Of Successful Resource Allocation

What are the benefits of Resource Scheduling and Planning Solution?

An effective workforce scheduling and planning system can resolve several challenges faced by an audit and accounting firm with the matrix organisation. It will provide immense benefits in the following areas:

Gain visibility of all your resource or workforce demand across the enterprise

The system can achieve 360-degree visibility into all work demand types, be it project, non-project, BAU/admin, and vacations. It also highlights this information across verticals of geography, functions, domains, and business units.

Deploy competent person at the right time and cost

Having the right person with the right skills is crucial for a project to finish within budgeted time and cost. Resource scheduling methodology can Identify and allocate a competent person. It can be based on their skills, experience, qualifications, location, team, cost rate, and any other criteria you prefer. In the absence of such a capability, the organisation will land up with a large bench of mismatched skillset.

Forecast shortfall/excess of resources and take corrective actions

The system can forecast resource demand for every type of project and non-project work to Identify shortfall/excesses of resources. You can adjust project timelines, retrain current employees, or hire a contingent workforce ahead of the time.

Maximise utilisation of workforce on billable and strategic projects

The system can forecast billable and strategic utilisation of the workforce ahead of time so that you can mobilise employees from non-billable or low priority work to billable or high priority projects.

Billable utilisation is a critical KPI for a professional service business to ensure profitability and sustainability.

Read More
Maximize Profitable Resource Utilization with Modern Resource Management Solution

Control project cost ahead of time by forecasting project financials

The system can track critical financial indicators for a project like resourcing cost, revenue, profit margins, and overheads. It can help you take corrective action and control project costs ahead of time. It will help you to control Band Mix for a typical IT services organisation.

What Resource Scheduling and Planning Tools are Currently Used by Audit and Accounting Firm?

Most of the audit and accounting firms are fighting against the resource management challenges of the 2020s with the systems developed in 1990s.

It is valid for all types of companies irrespective of the size or market share or market reputation. The tools listed below are some examples of legacy systems:

• Silos of spreadsheets built with macros
• Home-grown half-baked systems
• Windows-based systems of the 1990s
• Entry-level resource scheduling software

Most of these outdated legacy tools have the following challenges: –

• Easy to develop but difficult to maintain
• Paying a high price for lost market opportunities
• Unable to provide forecasting and capacity planning
• Not designed for improving profitable utilisation & cost reduction
• Unsuitable for matrixed organisation structure
• Unable to deliver real-time business intelligence

Best practices for efficient resource scheduling and planning solution

Resource scheduling is not only about plugging the hole by scheduling or allocating resources against the projects. It goes much beyond this process. A comprehensive resource scheduling and planning solution includes enterprise-wide resource scheduling, forecasting, capacity planning, utilisation management, tracking actuals, etc.

Enterprise resource or workforce scheduling

The system should provide a single schedule for the whole enterprise to establish a single source of truth. For example,

• Scheduling or allocation can be done in real-time by multiple stakeholders
• agile resource allocation can be achieved with easy drag and drop
• the schedule can be viewed in numerous ways in a matrix organisation structure
• Ensure there is no double booking

Management of matrix organisation structure

Most of the large organisations have now moved into a matrix reporting structure that has multiple dimensions. The resource planning system provides visibility of people’s information across the complex matrix organisation structure and controls the rights to modify them. It ensures that resources are not fallen in the cracks.

Competency tracking and allocating right people

It is critical to keep competency information up to date. The right people are assigned to the right project across the enterprise based on skill, experience, qualifications, location, cost rate, etc. This information can be updated by the concerned user, which can be validated before accepting it.

Read More
Resources and Capabilities Analysis: The Human Resource Perspective

Forecast workforce utilisation

The system should provide short- or long-term forecasting of billable, strategic, and overall workforce utilisation. So that the corrective actions can be taken to protect the effective utilisation and profitability of your business. As a result, the stakeholders managing different dimensions can foresee the information required to make the right decisions.

Resources capacity planning

The system should forecast capacity vs demand from multiple perspectives, i.e., by role, department, team, location, skills, etc. It helps you identify short or long-term shortage/excess of resources ahead of time and reduce undesirable hiring/firing decisions.

Project pipeline management

The system should keep track of future project requirements to ensure that your resource pool is optimally balanced and skilled. It will also make it ready to meet the demand of projects in the opportunity pipeline or approval pipeline. It will help in planning hiring or training related decisions ahead of time.

Read More
Beat Market Volatility With Efficient Resource Capacity Planning

Tracking actuals against forecast

The system should help you keep track of actual time spent against the estimates. So that future forecasting can be improved and aligned to reality. It will also help you monitoring shared resources who are working in multiple activities.

How Resource Scheduling and Planning can improve Profitability & Productivity?

Resources scheduling and planning can help an audit, and accounting firm unleashes human resources’ full potential and significantly improve profitability and productivity.

Improve profitable utilisation

A business can improve profitability by implementing strategic and billable utilisation across the enterprise using effective resource management. As a result, valuable and critical resources do not get assigned to not so essential projects or activities.

Reduce resourcing cost

With the help of efficient resource management, overall resourcing cost can be reduced drastically:

• Eliminate under/over skilled resources on projects
• Utilise cost-effective global resources without compromising quality
• Avoid last-minute hiring cost thru with proper capacity planning
• Reduce unplanned attrition

Read More
Reduce Resourcing Cost by 10-30% with Modern Resource Management Solution

Reduce hiring/firing cost

Hiring/ firing costs can be reduced by using workforce forecasting and capacity planning.
Forecasting enables proactive smoothening of project workload and reskilling employees. Frequent Hiring/Firing creates a negative image for the organisation for attracting new talents. It is also an expensive exercise and affects the existing employees’ morale.

Improve workforce productivity

Resource management can improve employee productivity significantly:

• Employees having work allocated as per their competencies and area of interest
• Employees being able to work on different types of projects across the business
• Employees being reskilled to bridge future resource capacity gaps
• Employees being empowered in the early decision-making process

How to Choose the Right Tool for Efficient Resource Scheduling and Planning?

Resource scheduling and planning is crucial for the performance improvement of modern business. So, a business should not just look for a solution that just replaces the current spreadsheet functionalities. It should go much beyond that and ensure that they have a solution that can provide the following:

Forecasts and improves profitability and productivity

Resource management solution should not only be doing scheduling, but it should also help your business to do multidimensional forecasting. It also provides real-time business intelligence to improve business performance, profitability, and productivity.

Read More
10 Reasons Why Resource Scheduling and Management is Crucial for a Business

Scalable, configurable, and expandable

Every business is different, so their resource management needs. You can’t have one size fits all. That is why a business should select a scalable, configurable, and expandable tool to meet future business needs.

Resolve complexities of matrix organisation structure

Nowadays, most businesses have established a matrix organisation structure to achieve the best utilisation of their workforce. So, it is critical for a business to have a software system that aligns with its matrix organisation structure.

Real-time BI: reports, analytics, and dashboards

Resource demand in a real-life business environment changes every minute. So, it is crucial for a resource management software to get real-time business intelligence, i.e., reports, analytics, and dashboards.

Integrations

Most businesses have already invested in enterprise-level systems holding quite a bit of data required by a resource management system. This specific information can be a resource profile, competencies project detail, etc. So, the resource management system must integrate seamlessly with existing systems.

Resource Scheduling and Planning Techniques and Tips

Following are different techniques and tips for efficient scheduling and planning both human and non-human resources.

Smart Allocation

Smart allocation is critical for an organisation to get the best value out of scarce resources. It includes:

• Enable enterprise-wide visibility of everyone’s capacity, competency, availability etc.
• Establish multidimensional view for each stakeholder, e.g. project-centric view for Project managers, resource-centric view for resource managers, location-centric view for global manager etc.
• Get a 360-degree view of every type of work done by an individual related to the project, non-project, vacation, training activity etc.
• Allocate the right resource to the right project at the right time

Resource Forecasting

In a dynamically changing resource demand scenario, it is critical to have powerful foresight into various aspects of resource management.

• Gain real-time and multidimensional viewing of various types of forecast
• Cater to specific forecasting needs of various stakeholders in a matrix structure
• Enable short-term, medium-term and long-term forecasting
• Be able to plan pipeline projects for most probable opportunities

Resource Optimisation

Resource optimisation is critical to get efficient usage and best value out of the enterprise resources. It involves:

• Identify the right resource for the right project at the right time
• Ensure that the resource is cost-effective
• Avoid over or under-skilled person working on a job
• Minimise over or under utilisation of the resource

Resource Capacity Planning

Resource capacity planning is the process of forecastingthe gap between the capacity and the demand. It involves:

• Identify the shortfall or excesses of resources during different periods
• Ensure that excess capacity is not wasted and utilised effectively
• Take corrective actions ahead of time to overcome the shortfall of resources

Resource Utilisation

Resource utilisation is the way to measure how effectively resources are utilised against their availability or capacity. It is important to ensure that:

• Resources are optimally utilised for productive activities
• Critical resources are assigned to Billable or Strategic projects as a push to Non- billable activities
• Low-cost resources are assigned to Non-Billable or administrative work if possible

Resource Modelling and Simulation

What-if analysis is used to do modelling for various planning scenarios to get the best outcome within existing resource constraints. This exercise involves:

• Juggle around different project timelines based on the priorities
• Put projects on hold if it is not immediately critical for the business
• Analysethe impact of the modelling on resource capacity, cost, utilisation etc.
• Determine the best possible scenario and apply it to the real plan

The SAVIOM Solution

SAVIOM is the market leader in providing an Enterprise Resource Capacity Planning solution. It has more than 20 years of experience working with high valued global companies around the world. SAVIOM also provides tools for project portfolio management, professional service automation, and workforce planning software. So, SAVIOM can help your business to establish an efficient system geared towards your specific business challenges.

The public sector is the most valuable asset for any country. In terms of project management, it is one of the largest plans to be executed, with people’s welfare being its goal. Roads, electricity, water supply and sanitation, are only some of the common examples which are a part of public infrastructure.

Due to the diversity of the projects undertaken in the government public sector, maintaining efficiency in the planning is of paramount importance. Consequently, the need for resources is driven by the challenges, benefits and promised benefits of the project in question.

Budget restrictions, resource management issues and lack of strong communication are a few of public service management issues that plague the sector.

The question is: how can resources be managed efficiently while maintaining compliance in all other areas?

After all, public sector efficiency is not just measured by reaching targets, but also need to get environmental, social and other clearances for its projects. And with the massive manpower of varying skills required at different stages of these projects, a workforce planning tool can be extremely useful.

A compatible tool can help manage both fixed employees and the consulting public sector staff, which is common in projects such as these. This makes it possible to allocate resources properly and overcome a number of public sector project challenges.

1. Tips for Managing the Public Sector

One of the biggest obstacles in resource management is the ability to improve the service delivery in government, even when dealing with various capabilities, skills and locations. When contending with large numbers of staff and employees, it can be tough to distribute work effectively, and also to measure the public sector productivity.

That’s where resource planning and scheduling software comes into play. With this effective tool, the public sector can:

• Quickly identify the best resources for the tasks: By implementing software, it becomes possible to instantly sift through a pool of thousands of providers in order to identify the best one for any given project. This will save time and money in getting the project underway.
• Plan resources optimally: Maximising output relies heavily on making the most of the hours and days in the project. Improved public sector efficiency can be achieved with the automated planning of resources made possible by the right software.
• Forecast resource capacity for the future: The Demand VS Capacity comparison will allow users to plan for the future.
• Track time/cost/billing and variances: Easily capture and track time, cost, and billing for the utmost in accuracy.
• Maximise utilization of resources: The ability to quickly identify and allocate resources translates into maximum public sector productivity.
• Simplify scheduling: By choosing the best resource scheduling software, the schedule process can be simple and intuitive.

With the inclusion of technology in almost every aspect of work, introducing automation in government projects makes sense. And resource planning tools can be a great answer for project managers in public sector consulting firms.

Planning for future projects with the existing resources can become a breeze with such a tool. Save time on getting project updates with the Gantt table format which is maintained real-time among stakeholders. Complete projects on time and take up more projects with the same resources.

A more appropriate question is, why shouldn’t they?

Engineering consultants are field-experts in diverse knowledge areas, some of which include geological, petrochemical, structural, civil, and electrical engineering. Considering that engineering consulting firms are teeming with specialists in these niche disciplines, it makes sense to take stock of valuable and relevant skill sets. It is a profession that makes use of both managerial and technical expertise to solve real-world problems.

The growth spurt of such firms is no accident. Demands are changing, bringing with it tougher problems to solve. Clients across the globe are struggling to keep up with a volatile economy and additionally find that they lack the manpower and the competencies in house to come up with a long-term strategic fix. Consulting engineers employ a fact-based approach to determine how and where which skills fit best. That is, they can recommend a long-term course of action even if it requires a different set of skills from the one they have.

A resource management software is an asset to engineering consulting services who aim to supply firms with the right engineering personnel. After all, the firm needs to know the type of engineering consultants at present and how many more such roles need to be filled in the future. Only then can they know what a competent consultant’s availability looks like in order to provide the service they specialize in. Here’s a closer look at what engineering consulting firms do and the benefits they get from using a resource planning tool.

1. How do engineering consulting firms operate?

Engineering consulting firms comprise of reputable, knowledgeable, and able consultants who work on either specific tasks, or the entire project. Professional engineering consultants would be actively involved in the ideation, planning, and design stages of a project and would even be called upon to provide project management expertise to the existing team.

In this regard, a product tool that can bring these resources and their schedules to the forefront lets you identify and profile such resources by their availability and capacity. Consequently, the time and efforts going into the engineering resource planning process is done with the intent to deploy the best resources to client locations. The benefits of practicing scientific resource management include:

A. Greater workflow visibility

Engineering consultants can work independently or as part of a bigger team, which drives the need to visualize both project and resource workflows.

Unconditional visibility into enterprise-wide team-based activities gives you clarity on what teams are on, how different skills are put to use, how long a project runs and if every competency is being optimally spread across multiple projects.

What’s more, it lets you minimize ‘noise’ from schedules, such as non-core, administrative or operational work, thus freeing the consultant to focus primarily on the work that they’re contracted for.

B. Skill-specific allocations

Projects staffed with the right quantity and quality of skills ensures that its key challenges are captured and resolved through appropriate channels. Just because a consultant engineer happens to be available for the location and time isn’t reason enough to deploy them. They should also be skilled in that particular area in order to be of true service.

This is where a resource allocation tool comes in handy. It draws data from competency availability reports and lets you allocate projects with professional engineering consultants based on their skills profile, existing effort investments, available hours and the project’s criticality. Efforts can then be matched to activity durations, enabling a more precise gauge of the project’s progress.

C. Future resource insights

Engineering consulting services aren’t immune to attrition and employee turnover, whether it happens due to retirement, resignation or termination of services. Both measures affect the business and inflow of workers, requiring predictions into resource capacity and demand fluctuations.

A capacity management plan is one of the best strategies to reduce employee turnover. Not only does it generate insights into the existing resource pool’s suitability and skills sufficiency for future projects but can also prevent a resource crunch arising from over or under utilization. In other words, it sizes up work and workforce at one go to identify projects that benched skills can be assigned to, ensuring all undertakings are optimally staffed.

Further, knowing the shifts in demand readies you for a project slump, or dry spell which sees fewer projects in the pipeline convert to true work. The time can then go into reskilling or upskilling measures so that your workforce can upgrade their capabilities and step into newly created roles that fit future assignments.

D. Maximized billability

To quote Ireland’s Association of Consulting Engineers, selecting an engineering consultant is one of the most important decisions an owner or client can make. In doing so, you ensure that the consultant’s recommendations follow a thorough understanding of the project as well as meets the quality of service expected.

A consultant bills his/her efforts based on the scope of work, timeline within which the service or product is to be delivered as well as which skills to be used. Naturally, consulting engineering services would want to maximize consulting billable hours to boost their revenue. Settling for a lower rate can force your staff to cut corners, thus compromising work quality.

The booked versus actuals report within a resource management tool drills down to a project’s billability based on the tasks engineering consultants are booked onto. This way, if a project ends early, on time or late, the hours specific efforts go into reflect the actual charges for the service provided. That is, cost rates can be re-estimated and adjusted for cost-efficiency.

2. What now?

Engineering services in the US alone grew by 2% and brought $250 billion in revenue. Given how advanced engineering consultants are in demand, it’s not surprising why firms like AECOM, Laing ‘O Rourke and Aurecon are reliant on a resource management tool like Saviom. After all, wouldn’t you look towards a process that skill-matches high-profile projects with ease, and precision?

Having studied those patterns for years, the founding fathers of Resource Management have prescribed the following four as the pillars of successful Resource Management:

• Absolute visibility of all resources and their projects
• Being able to allocate the right person to execute the job at hand
• Optimizing the utilization levels of all resources
• Forecasting future resource requirements

Certain pillars maybe important for certain project types; like constantly balancing skillsets with requirements becomes very important for volatile accounting projects as resources shift, while unyielding construction projects may do better with enhanced forecasting capabilities.

Over the years, we have had the opportunity to work with some of the most prestigious corporations of the world and this has led us to study the transformations that successful implementation of these pillars can cause. Here are the findings of our study.

FTI Consulting-Business Advisory:

The Company: FTI Consulting is a business advisory firm that specializes in corporate finance and restructuring.

The Roadblock: Weekly scheduling meetings at FTI used to be a time suck purely because they had no way to access their staffing situation. They basically lacked organization-wide visibility in terms of resource commitment levels and project statuses. This came in the way of finding the right person for the tasks at hand as well.

The Solution: Gantt charts are one of the best ways to have an organization-wide view of projects and resources. They not only provide visibility but also make individual files accessible. With Saviom’s advanced search filters and sophisticated Gantt Chart, FTI’s scheduling procedure, thus became a breeze.

Global Wind Services-Turbine Technicians:

The Company: Established in Denmark in 2008, Global Wind Service (GWS) installs and maintains onshore and offshore wind turbines for customers in over 30 countries.

The Roadblock: The GWS team was working with multiple Excel spreadsheets and missed having a unified view, that could align multiple project statuses, at one go. As a result, they could neither optimize output levels nor track pipeline projects such that they could plan well in advance.

The Solution: Enterprise-level ERM solutions make real-time modifications as well as tracking, very easy for managers who use them. Saviom, goes a step ahead with its data-driven utilization reports that lets managers track individual resource output statuses and allocate their tasks. As a result, GWS unlocked a potential to complete 10-20% more projects with 10% lesser staff.

Siemens AG – Global Conglomerate

The Company: Siemens Corporation, a company with employees in over 200 countries and 165 years of experience is a global technology powerhouse.

The Roadblock: Forecasting future requirements is essential for business to be both smart and agile. Having realised the importance of such intuitiveness, Siemens had tried everything from multiple Excel spreadsheets to developing their own tool for resource management. But nothing gave them the required ‘scientific’ edge over future requirements.

The Solution: Comparing future capacity against demand is a sure shot way of landing yourself with insights that will empower long-term as well as short-term decisions. Saviom’s capacity vs demand reports provide accurate data on forthcoming requirements. Along with this, the booked vs actuals and the timesheets features also helped Siemens develop the intuitiveness to forecast as much as 6 months ahead.

How has Resource Management changed things at your organization? Tell us with your comments below.

Overwork has been mistaken as a means or measure of productivity despite its converse effect on real productivity. And, in the context of the Consulting and Auditing industry, it has intertwined with work culture so much so that it has long been accepted as the industry norm.  Naturally, when the industry seeks to reform its ways and reduce the stress levels that are experienced by professionals, work culture solutions become the way out even if they are not very effective.

What organizations have failed to note is how proper resource allocation can provide real, actionable solutions to mitigating the need to overwork, which is not only easy to measure but also easy to replicate in numbers. Resource allocation simply makes room for a direct cause-effect relationship between workforces and project success thus measuring productivity on terms other than mere long hours. Consulting and Auditing firms which have so far, struggled trying to fix these issues with work culture solutions can potentially find far more sustainable and action-oriented solutions in scientific allocation and management.

Besides, resource mismanagement is tied in with poor output statuses of a lot of organizations. 50% of businesses had a project failure during the last year and according to 74% of respondents, lack of resources to meet project demands was one of the primary reasons. In another study, 50% respondents reported that their top risk is lost productivity because resources are not optimized, followed by remaining in crisis mode.

Workforce Woes

Let’s first see an overview of the hazards that overwork causes which range from fatigue and sleep-deprivation to lower output levels which make it hard to perform at a high cognitive level.

• Alexandra Michel, a former Goldman Sachs associate published a nine-year study of two big investment banks. The bankers Michel studied started to break down in their fourth year on the job. They suffered from depression, anxiety, and immune-system problems, and performance reviews showed that their creativity and judgment declined.
• In another similar study, by the sixth year of their employment, the participants, now in their mid-30s, had split into two camps: the 60% who remained “at war” with their bodies, and the remaining 40% who decided to prioritize their health, meaning they paid more attention to sleep, exercise and diet and set limits on how much they allowed work to consume them.
• This is not limited to financial institutions as about 73% of county public defender offices reported to have exceeded the maximum recommended limit of cases.
• Also, levels of depression, anxiety and stress among attorneys are significant, with 28%, 19% and 23% experiencing mild or higher levels of depression, anxiety and stress, respectively.

It is not as if Consulting and Auditing firms haven’t really tried to make amends to this. From mandatory time off to maximum weekly work hours,  a lot of measures have been enforced. But as stated before, most of these changes remain in fixing things from the ‘work culture’ realm of  things, which does not change unless their nature of work itself does.

Resource Management though, is a pragmatic solution that deals with making sure that every project begins with enough resources on them. Every resource’s predetermined optimal output is measured and the aim is to only make sure that the level is reached. Further, output is measured in terms of project’s impact and success. Managers can also correlate output levels and project quality directly and thus measure optimal utilization on terms other than just long hours.

Resource Rethink

A robust Resource Management tool can do all this and more. Simply put, Resource Management can really help such organizations gain perspective on quality of productivity and output delivered. They can be leaner, earn better ROI and retain their best employees.

In addition, when you choose Saviom, you can not only visualise your entire resource pool and work, but also optimise the output of your workforces.  Its intuitive multifaceted features are designed to tackle all your planning and scheduling woes irrespective of the magnitude or the level of detailing involved. All in all, enough has been spoken about work culture problems across industries. It is time that you armed yourselves with real-data to solve them.